Senate Bill No. 656

(By Senators Dittmar, Fanning, Hunter, Kessler, McCabe, Oliverio, Ross, Deem and McKenzie)

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[Originating in the

Committee on the Judiciary;

reported February 29, 2000.]

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A BILL to repeal articles twenty and twenty-one, chapter forty- seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended; and to further amend said code by adding thereto a new chapter, designated chapter ten-a, relating to revising the laws governing charitable bingo and charitable raffles; providing for charitable gaming; setting forth legislative intent; defining terms; establishing who may engage in charitable gaming; requiring application for licensure; prohibiting transfer of license; providing for an annual license; providing for a super bingo license; providing for a limited occasion bingo license; setting forth requirements for bingo occasions; establishing prohibited conduct and making certain exceptions thereto; establishing venue of bingo occasions; providing for limited occasion raffles licenses; authorizing conduct of certain raffles without a license; establishing license fees; exempting gross proceeds other than state fair bingo proceeds from taxation; providing for the use of state revenue derived from proceeds; setting forth requirements for licensure applications; authorizing amendment of license; permitting licensees to adopt rules and regulations; establishing general limitations on prizes; limiting the amount of and the number of persons who may be paid compensation for conducting charitable gaming; authorizing concessions; setting forth permitted uses of proceeds; limiting expense expenditures; requiring percentage of proceeds be donated to certain charitable and public service entities; authorizing commissioner to disapprove contracts for sale of goods or services; establishing limitations on premises rented for super bingo occasions; setting forth recordkeeping and accounting requirements of licensees; authorizing advertising; declaring charitable or public service purposes of state fair proceeds; providing for state fair charitable gaming license; authorizing state fair board to adopt rules and regulations; requiring licensees to file reports with commissioner; providing that copies of licenses be filed with county clerks; requiring commissioner to make license applications available to public; authorizing county option election and specifying procedures therefor; prohibiting certain convicted felons from participating in charitable gaming; providing for administration by commissioner; authorizing commissioner to take action regarding licensure and to impose fees and civil penalties; establishing administrative review procedures; creating crimes and establishing criminal penalties; authorizing transitional amnesty and establishing procedures therefor; providing for the use of bingo and raffles equipment; requiring smoking and nonsmoking sections; exempting certain solicitation and sales from law governing solicitation of charitable contributions; establishing effective date; and providing for severability.

Be it enacted by the Legislature of West Virginia:
That articles twenty and twenty-one, chapter forty-seven of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be repealed; and that said code be further amended by adding thereto a new chapter, designated chapter ten-a, to read as follows:
CHAPTER 10A. CHARITABLE GAMING.

ARTICLE 1. CHARITABLE GAMING.
§10A-1-1. Legislative intent.
The Legislature finds and declares that many fraternal and community organizations, volunteer fire departments, churches and other charitable or public service organizations perform an important role and benefit a number of the citizens of this state with respect to: (1) Assisting them to establish themselves in life as contributing members of society through education or religion; (2) relieving them from disease, distress, suffering, constraint, or the effects of poverty; (3) increasing their comprehension of and devotion to the principles upon which this nation was founded and to the principles of good citizenship; (4) educating or making the public aware of issues of public concern; (5) lessening the burdens borne by government by voluntarily supporting, augmenting or supplementing services which government would normally render to the people; (6) providing or supporting nonprofit community activities for youth, senior citizens or the disabled; and (7) providing or supporting nonprofit cultural artistic activities.
The Legislature, in recognition of the foregoing and in recognition of the need charitable and public service organizations have for a practicable way of raising funds, declares its intent to grant the privilege of holding bingo games and raffles to those organizations which qualify for a license as provided in this article.
§10A-1-2. Definitions.
For purposes of this article, unless specified otherwise:
(a) "Bingo" means the game wherein participants pay consideration for the use of one or more faces or cards bearing several rows of numbers in which no two faces played in any one game contain the same sequence or pattern. When the game commences, numbers are selected by chance, one by one, and announced. The players cover or mark those numbers announced as they appear on the face or faces which they are using. The player who first announces that he or she has marked or covered a predetermined sequence or pattern which had been pre-announced for that game is, upon verification that he or she has marked or covered the predetermined sequence or pattern, declared the winner of that game.
(b) "Bingo occasion" or "occasion" means a single gathering or session at which a series of one or more successive bingo games is conducted by a single licensee.
(c) "Charitable or public service activity or endeavor" means any bona fide activity or endeavor which directly benefits a number of people by:
(1) Assisting them to establish themselves in life as contributing members of society through education or religion;
(2) Relieving them from disease, distress, suffering, constraint or the effects of poverty;
(3) Increasing their comprehension of and devotion to the principles upon which this nation was founded and to the principles of good citizenship;
(4) Making them aware of or educating them about issues of public concern so long as the activity or endeavor is not aimed at influencing legislation or supporting or participating in the campaign of any candidate for public office;
(5) By lessening the burdens borne by government or voluntarily supporting, augmenting or supplementing services which government would normally render to the people;
(6) Providing or supporting nonprofit community activities for youth, senior citizens or the disabled;
(7) Providing or supporting nonprofit cultural or artistic activities; or
(8) Providing scholarships for a person or persons deemed worthy by the organization.
(d) "Charitable or public service organization" means a bona fide, not for profit, tax-exempt, benevolent, educational, philanthropic, humane, patriotic, civic, religious, fraternal or eleemosynary incorporated or unincorporated association or organization; or a volunteer fire department, rescue unit or other similar volunteer community service organization or association which engages in charitable or public service activities or endeavors; but does not include any nonprofit association or organization, whether incorporated or not, which is organized primarily for the purposes of influencing legislation or supporting or promoting the campaign of any candidate for public office.
For purposes of this article, an organization or association is tax-exempt if it is, and has received from the Internal Revenue Service a determination letter that is currently in effect stating that the organization is, exempt from federal income taxation under subsection 501(a) and described in subsection 501 (c)(3), 501(c)(4), 501 (c)(8), 501(c)(10), 501(c)(19) or 501(d) of the internal revenue code. Any other organization shall be considered tax exempt for purposes of this article if the commissioner issues a written finding that the organization would, upon application to the internal revenue service, be entitled to receive such a determination letter.
(e) "Charitable gaming" means the licensed conduct of charitable bingo or charitable raffles or both charitable bingo and charitable raffles.
(f) "Commissioner" means the state tax commissioner.
(g) "Conduct" means to direct the actual playing of a bingo game by activities including, but not limited to, handing out bingo supplies, collecting fees, drawing the numbers, announcing the numbers, posting the numbers, verifying winners and awarding prizes or to direct the actual holding of raffles by activities including, but not limited to, selling chances, drawing the winning numbers or names, announcing the winning numbers or names, posting the winning numbers or names, verifying winners and awarding prizes.
(h) "Donate", "donated", "donation" or "donations" means the act or acts of gratuitously remitting money, transferring other property or providing the use of property or services to another, the amount or amounts of which shall be based on the fair market value thereof determined pursuant to a legislative rule proposed by the commissioner in accordance with the provisions of chapter twenty-nine-a of this code;
(i) "Joint bingo occasion" means a single gathering or session at which a series of one or more successive bingo games is conducted by two or more licensees.
(j) "Joint raffles occasion" means a single gathering or session at a fixed location during which a series of one or more raffles is conducted by two or more licensees.
(k) "Licensee" means an organization or association granted an annual, limited occasion, super bingo or state fair charitable gaming license pursuant to the provisions of this article.
(l) "Manager-operator" means an individual who is charged with the overall responsibility for the licensee's charitable gaming operation, including but not limited to: (1) Maintaining the fiscal integrity of the charitable gaming operation and the proper maintenance, accounting for and handling of all funds and revenues derived therefrom and of all accounts related thereto; (2) the timely filing of all required financial and operational reports; (3) obtaining required financial compilations, reviews or audits; (4) maintaining the integrity of the gaming process and fair gaming operations; (5) assuring the prompt payment of gaming prizes which have been legitimately won; (6) assuring that all gaming operations are free of fraud or misrepresentation; (7) scheduling charitable gaming operations; (8) supervising charitable gaming operations; (9) supervising volunteer and paid workers at the charitable gaming occasion; (10) supervising the preparation of any required daily report forms; and (11) performing any other managerial duties in connection with the conduct of charitable gaming.
(m) "Operator" means an individual, either volunteer or paid, who is responsible only for specific duties in connection with the actual conduct of charitable gaming occasions.
(n) "Patron" means an individual who attends a charitable bingo occasion other than an individual who is participating in the conduct of the occasion, regardless whether the individual is charged an entrance fee or plays any charitable games.
(o) "Person" means an individual, association, society, incorporated or unincorporated organization, firm, partnership or other non-governmental entity or institution.
(p) "Qualified expenditure for charitable or public service purposes" means any expenditure of moneys by a licensee for: (1) Payment of prizes awarded to winners of charitable bingo games or raffles; (2) the reasonable, necessary and actual expenses incurred in connection with the conduct of charitable gaming, including but not limited to, custodial services, rent, advertising, equipment and supplies to conduct charitable gaming, security personnel, promotional supplies, workers or operators required to conduct the charitable gaming and child care services for the children of patrons; and expenses directly related to the existence and operation of the licensee charitable or public service organization where these expenses are directly related to the charitable or public service purpose directly underlying the tax exempt status of the licensee organization, including but not limited to: (i) The annual cost of housing the licensee organization, including but not limited to, rent, mortgage payments, maintenance and repairs; (ii) property, casualty or liability insurance for the licensee organization; (iii) on-going utility expenses; (iv) printing, postage and mail expense; (v) workers; and (vi) any other expense incurred by the licensee organization directly in furtherance of its charitable or public service purpose; and (3) donations, as provided in section eighteen of this article.
(q) "Raffle" or "raffles" means a game or games involving the selling of chances to participate in such game entitling the players purchasing the chances the opportunity to win a prize or prizes.
(r) "Venue" means the premises on which bingo occasions are held.
§10A-1-3. Who may engage in charitable gaming; application for license; licenses not transferable.

(a) Any charitable or public service organization which has been in existence in this state one year prior to filing an application for a charitable gaming license issued pursuant to section four, five, six or nine of this article may conduct charitable gaming in accordance with the provisions of this article during the time it holds a valid license: Provided, That a separate license is required for charitable bingo and for charitable raffles.
(b) Application for a charitable bingo or charitable raffles license shall be made to the commissioner on a form supplied by the commissioner. The application shall contain the information required by section twelve of this article and any other information which the commissioner considers necessary. The application shall state whether it is for a charitable bingo license or a charitable raffles license or for a charitable bingo license and a charitable raffles license. An application shall be filed not less than sixty days before the date when the applicant intends to first conduct charitable gaming. No charitable gaming may be conducted until an application filed in accordance with this article has been approved by the commissioner, and the license has been received. The commissioner may approve an application in less than sixty days and shall send the applicant its license within five days after approval of the application.
(c) If the commissioner has not acted on an application within sixty days from the date the application is received by the commissioner, as evidenced by a canceled check or other acceptable evidence that the application fee has been remitted and a return receipt for certified mail showing the application and application fee were mailed to the commissioner, an applicant may proceed to conduct the charitable gaming it had applied for a license to conduct.
(d) No license issued pursuant to this article may be transferred.
§10A-1-4. Annual license; frequency and duration of occasions; license displayed.

A charitable or public service organization or any of its auxiliaries or other organizations otherwise affiliated with it may apply for an annual charitable gaming license. Only one annual charitable bingo and one annual charitable raffles license per year in the aggregate may be granted to a charitable or public service organization and all of its auxiliaries or other associations or organizations otherwise affiliated with it: Provided, That for purposes of this section the various branches, chapters or lodges of any national association or organization or local churches of a national association or organization or local churches of a nationally organized church are not considered affiliates or auxiliaries of each other. The commissioner shall propose a legislative rule which provides the manner for determining to which organization, whether the parent organization, an affiliate or an auxiliary, the one license allowed under this section is granted. An annual charitable bingo license is valid for one year from the date of issuance and entitles only the licensee to hold no more than one hundred four bingo occasions per year: Provided, however, That the licensee may hold no more than fifteen bingo occasions during any calendar month. No two or more organizations may hold a joint bingo occasion under any annual licenses. No bingo occasion held pursuant to an annual license may exceed twelve hours duration. An annual charitable raffles license is valid for one year from the date of issuance. The commissioner shall prorate the license fee of any annual license issued on a calendar year basis.
A licensee shall display its annual charitable bingo license or charitable raffles license, or a copy thereof, conspicuously at the location where the charitable gaming is conducted.
No organization may hold a joint charitable gaming occasion under any annual licenses.
§10A-1-5. Super bingo license, frequency and duration of occasions, license displayed.

Any charitable or public service organization may apply to the commissioner for issuance of one annual super bingo license per year.
A holder of a super bingo license may conduct twelve super bingo occasions each year during the period of the license and at each occasion may award up to fifty thousand dollars in prizes, notwithstanding the limitation on prizes set forth in section fifteen of this article. No super bingo occasion shall exceed twelve hours in duration.
A charitable or public service organization that has a regular or limited occasion bingo license may apply for and be issued a super bingo license.
A licensee holding a super bingo license shall display its license, or a copy thereof, conspicuously at the location where the occasion is conducted.
§10A-1-6. Limited occasion bingo license; conditions on holding games.

A limited occasion bingo license is valid only for the time period specified in the application and entitles only the licensee to hold a bingo occasion once every twenty-four hours for a time period not to exceed two weeks. Two or more organizations may hold a joint bingo occasion provided each participating organization has been granted a limited occasion bingo license for such jointly held occasion. No bingo occasion held pursuant to a limited occasion license may exceed twelve hours in duration. Each charitable or public service organization which desires to hold bingo occasions pursuant to this section, or any of its auxiliaries or other organizations otherwise affiliated with it, shall obtain a limited occasion license notwithstanding the fact that it holds a valid annual license: Provided, That no licensee which holds an annual license may obtain more than one limited occasion license during the period of its annual license.
Only three limited occasion bingo licenses per year in the aggregate may be granted to a charitable or public service organization and all of its auxiliaries or other associations or organizations otherwise affiliated with it, none of which hold an annual license. For purposes of this section, the various branches, chapters or lodges of any national association or organization or local churches of a nationally organized church are not considered affiliates or auxiliaries of each other. The commissioner shall propose a legislative rule which provides the manner for determining to which organization, whether the parent organization, an affiliate or an auxiliary, the three licenses allowed under this section are granted.
A licensee shall display its limited occasion bingo license conspicuously at the location where the bingo occasion is held.
§10A-1-7. Bingo occasions open to public; no participation by those under age of eighteen; exception; prohibition of alcoholic beverages at bingo occasions; limitation on cashing patron's checks.

(a)All charitable bingo occasions shall be open to the general public: Provided, That no licensee shall permit or allow any individual under the age of eighteen to participate in the playing of any bingo game with knowledge or reason to believe that the individual is under the age of eighteen: Provided, however, That an individual under the age of eighteen may attend the playing of a bingo game when accompanied by and under the supervision of an adult relative or a legal guardian of said individual: Provided further, That a junior volunteer firefighter sixteen years of age or older may assist the volunteer fire company of which he or she is a member in the conduct of a bingo game or raffle if the junior firefighter is supervised by a senior member of the same volunteer fire company who is more than twenty-one years of age.
(b) The sale or the consumption of alcoholic beverages or nonintoxicating beer is prohibited in any area where and during the time charitable bingo is conducted.
(c) A licensee may receive and cash personal checks of any patron in an amount not to exceed one hundred dollars during the normal operation of a bingo game.
§10A-1-8.Venue of bingo occasions.
Any charitable or public service organization or any of its auxiliaries or other organizations otherwise affiliated with it possessing an annual or limited occasion bingo license or a super bingo license shall conduct a bingo occasion only in the county within which the organization is principally located.
Any licensee which, in good faith, finds itself unable to comply with this requirement shall apply to the commissioner for permission to conduct a bingo occasion in a location other than the county in which the organization is principally located: Provided, That the location shall be in a contiguous county, or if not in a contiguous county and not in the county where the licensee organization has its principal location, the location of the proposed bingo occasion may be no more than thirty air miles from the county within which the organization is principally located. The application shall be made on a form provided by the commissioner and shall include the particulars of the requested change and the reasons for the change. The application shall be filed no later than thirty days before any scheduled bingo occasion.
For purposes of this section, the principal location of a licensee is the address of the licensee shown on the licensee's West Virginia business registration certificate.
§10A-1-9. Limited occasion raffles license; conditions on holding of raffles.

A limited occasion raffles license is valid only for the time period specified in the application and entitles only the licensee to hold two raffles occasions during the time period specified, which may not exceed six months from the date of issuance of the limited occasion license.
Two or more organizations may hold a joint raffles occasion provided each participating organization has been granted a limited occasion raffles license for such jointly held occasions: Provided, That no licensee which holds an annual charitable raffles license may obtain more than one limited occasion raffles license during the period of its annual license.
Subject to the limitations set forth in this section for charitable or public service organizations having an annual license, a charitable or public service organization and all of its auxiliaries or other associations or organizations otherwise affiliated with it, may be granted only three limited occasion charitable raffles licenses per year in the aggregate. For purposes of this section the various branches, chapters or lodges of any national association or organization or local churches of a nationally organized church are not considered affiliates or auxiliaries of each other. The commissioner shall propose a legislative rule which provides the manner for determining to which organization, whether the parent organization, an affiliate or an auxiliary, the three licenses allowed under this section are granted.
A licensee shall display its limited occasion raffles license conspicuously at the location where the raffles occasion is held.
§10A-1-10. Authorizing the conduct of certain raffles without a license.

Notwithstanding the provisions of section three of this article, any charitable or public service organization which has been in existence in this state for at least one year is authorized to conduct charitable raffles without obtaining a license pursuant to the provisions of this article: Provided, That any prize awarded in any single raffles may not exceed in value the sum of five thousand dollars: Provided, however, That the cumulative gross proceeds derived from the conduct of raffles pursuant to the provisions of this section may not exceed fifteen thousand dollars during any calendar year. An organization conducting charitable raffles pursuant to the provisions of this section is not subject to the record-keeping provisions of section nineteen of this article but shall maintain a separate accounting for the operation of raffles. All records required by this section shall be maintained for at least three calendar years and made available for reasonable inspection by the commissioner.
§10A-1-11. License fees and exemption from taxes.
(a)A license fee shall be paid to the commissioner for annual licenses in the amount of five hundred dollars, except that for volunteer or nonprofit groups who expect to gross less than twenty thousand dollars throughout the license period the fee is two hundred dollars and for bona fide senior citizen organizations the fee is fifty dollars. A license fee shall be paid to the commissioner for a super bingo license in the amount of five thousand dollars. A license fee shall be paid to the commissioner for a limited occasion bingo license in the amount of one hundred dollars. A license fee shall be paid to the commissioner for a limited occasion raffles license in the amount of fifty dollars. A license fee of five hundred dollars shall be paid to the commissioner for a state fair charitable gaming license as provided in section twenty-two of this article.
(b) The gross proceeds derived from the conduct of charitable bingo are exempt from state and local business and occupation taxes, income taxes, excise taxes and all special taxes. The licensee is exempt from payment of consumers sales and service taxes and use taxes on all purchases for use or consumption in the conduct of charitable bingo and is exempt from collecting consumers sales taxes on any admission fees and sales of bingo faces: Provided, That the exemption provided in this subsection does not apply to state fair bingo proceeds.
(c) The gross proceeds derived from the conduct of charitable raffles are exempt from state and local business and occupation taxes, income taxes, excise taxes and all special taxes. Any charitable or public service organization conducting charitable raffles pursuant to the provisions of this article is exempt from payment of consumer sales and service taxes, use taxes and all other taxes on all purchases for use or consumption in the conduct of raffles and is exempt from collecting consumers sales taxes on any admission fees and sales of raffles chances.
(d) All revenue from license fees shall be deposited in the special revenue account hereby established and appropriated by the Legislature to support the regulation of charitable gaming by the commissioner. The license fees imposed by this section are in lieu of all other license or franchise taxes or fees of this state and no county or municipality or other political subdivision of this state is empowered to impose a license or franchise tax or fee on the conduct of any charitable bingo or raffles.
§10A-1-12. Information required in application.
An application for a charitable gaming license shall include the following information:
(a) Name of the applicant and name and headquarters address of any state or national organization of which it is a local branch or lodge;
(b) The address and telephone number of the applicant organization, if any. If the applicant organization has no telephone, then the address and telephone number of the person applying on behalf of such organization shall be supplied;
(c) For a limited occasion license, the names and addresses of two or more bona fide active members, supporters, volunteers or employees of the applicant organization who have been active members in good standing of the licensee organization or its authorized auxiliary organization or who have been meaningfully affiliated with the licensee organization at least one year prior to the date of filing of the application for a charitable gaming license or the most recent filing of an application for renewal of the license and who are charged with overall responsibility for the applicant's bingo or raffles operations, at least one of whom shall be present and function as a manager-operator for the applicant's charitable gaming operations at all times such gaming operations are conducted; and the names and addresses of the highest elected officer of the licensee and his or her officially appointed designee;
(d) For an annual license, the names, addresses and telephone numbers of three or more bona fide active members supporters, volunteers or employees of the applicant organization who have been active members in good standing of the licensee organization or its authorized auxiliary organization or who have been meaningfully affiliated with the licensee organization at least one year prior to the date of filing of the application for a charitable gaming license or the most recent filing of an application for renewal of the license and who are charged with overall responsibility for the applicant's charitable gaming operations, at least one of whom shall be present and function as a manager-operator for the applicant's charitable gaming operations at all times charitable gaming is conducted; and the names and addresses and telephone numbers of the highest elected officer of the licensee and his or her officially appointed designees;
(e) The address or location of the premises where licensed charitable games are to be held or the geographical area where charitable raffles are to be conducted, as the case may be;
(f) Information as may be required by the commissioner to satisfy him or her that the applicant meets the requirements of:
(1) Being a charitable or public service organization as required by this article; and
(2) Being in existence in this state one year prior to filing an application for a charitable gaming license.
(g) The day or days of the week, and the time or times when bingo occasions will be held;
(h) The name of the owner of the premises where bingo occasions are to be held and a copy of all rental agreements involved if leased or subleased by the applicant from the owner or lessee;
(i) A statement as to whether the applicant has ever had a previous application for any charitable gaming license refused or whether any previous license has been revoked or suspended;
(j) A sworn statement that the proceeds from charitable gaming will be used solely for qualified expenditures for charitable or public service purposes;
(k) A statement or statements to the effect that the individuals specified in subdivision (c) of this section and the officers of the applicant understand:
(1) That it is a violation of this article to allow any persons other than those authorized by this article to conduct any part of the charitable games;
(2) That it is required to file the reports and keep the records as provided by this article; and
(3) That it is a crime to violate the provisions of this article and, in addition, that a violation may result in suspension or revocation of its license and denial of applications for subsequent licenses;
(l) A sworn statement by an authorized representative of the applicant that the information contained in the application is true to the best of his or her knowledge;
(m) A list of the names and addresses of all officers and members of the board of directors, governors or trustees, if any, of the applicant organizations; and
(n) Any other necessary and reasonable information which the commissioner reasonably may require.
§10A-1-13. Amendment of license.
If circumstances beyond the control of the licensee organization prohibit it from holding any charitable bingo occasion in accordance with the information provided by it in its license application form, the licensee organization may request in writing approval by the commissioner to:
(a) Modify the holding of one or more bingo occasions held pursuant to an annual license or super bingo license if the changes are temporary;
(b) Modify the holding of one or more bingo occasions held pursuant to a limited occasion license if the changes affect fewer than one-third the occasions to be held under the license; or
(c) Amend its original license if the changes to the holding of occasions pursuant to an annual license or super bingo license are permanent or if the changes affect one-third or more of the occasions to be held under a limited occasion license.
§10A-1-14. Licensee rules and regulations.
Each licensee may adopt rules and regulations, not inconsistent with or in violation of the provisions of this article, or rules promulgated hereunder, to govern the conduct of charitable gaming occasions, except that no licensee may allow an individual not present to play any charitable bingo.
Any rules and regulations adopted by the licensee shall be made available for inspection at all charitable gaming occasions held. Any such rules and regulations adopted are a part of the records required to be kept by section nineteen of this article.
§10A-1-15. Limits on prizes awarded - general provisions.
Except as otherwise provided in this article, during the period of a license the average total prizes awarded by a licensee, or in the aggregate by two or more limited occasion licensees holding a joint bingo occasion, for any bingo occasion held pursuant to an annual or limited occasion license, may not exceed fifteen thousand dollars in value.
Prizes may be money or merchandise other than beer, nonintoxicating beer, wine, spirits or alcoholic liquor as defined in section five, article one, chapter sixty of this code. If the prizes are merchandise, the value assigned to them is their fair market value at the time they are awarded.
§10A-1-16. Compensation.
No individual who participates in the conduct of charitable gaming may receive or accept any commission, wage, salary, reward, tip, gratuity or other form of compensation or remuneration whether directly or indirectly, regardless of the source, for his or her work, labor or services in conducting charitable gaming except:
(a) A licensee may pay a salary, the minimum of which shall be established at the federal minimum wage and the maximum which shall be ten dollars and fifty cents per hour, to operators of charitable raffles or charitable bingo games.
(b) If the licensee's gross receipts from charitable gaming equal or exceed one hundred thousand dollars for the period covered by the licensee's most recently filed annual financial report, a salary may be paid to not more than twelve operators.
(c) If the licensee's gross receipts from charitable gaming are less than one hundred thousand dollars, but equal or exceed fifty thousand dollars for the period covered by the licensee's most recently filed annual financial report, a salary may be paid to not more than eight operators.
(d) If the licensee's gross receipts from charitable gaming are less than fifty thousand dollars for the period covered by the licensee's most recently filed annual financial report, a salary may be paid to not more than five operators.
(e) In the case of a licensee lawfully holding a charitable bingo occasion simultaneously with the conduct of charitable raffles, the number of paid charitable gaming operator employees allowed under this limitation for charitable gaming licensees is twice the number allowed for the conduct of charitable bingo or charitable raffles alone.
(f) For a super bingo occasion, the maximum number of paid employees is thirty for the super bingo occasion and thirty for the conduct of charitable raffles held in conjunction with the super bingo occasion: Provided, That a licensee may have the amount of employees reasonably necessary to conduct a super bingo occasion where the number of patrons at that super bingo occasion exceeds nine hundred.
§10A-1-17. Concessions.
A licensee may allow any individual, firm, partnership or corporation to operate concessions in conjunction with charitable gaming occasions and to be compensated for the concession operation.
§10A-1-18. Permitted uses of proceeds; disapproval of certain contracts or leases.

(a) During the period of a charitable gaming license, the gross proceeds from charitable gaming may only be used by a licensee for: (i) Payment of prizes awarded to winners of charitable bingo games or raffles; (ii) payment of reasonable, necessary and actual expenses incurred in connection with the conduct of charitable gaming, including, but not limited to, custodial services, rent, advertising, equipment and supplies to conduct charitable gaming, security personnel, promotional supplies, workers or operators required to conduct charitable gaming and child care services for the children of patrons; and expenses directly related to the existence and operation of the licensee charitable or public service organization where these expenses are directly related to the charitable or public service purpose underlying the tax exempt status of the licensee organization, including, but not limited to, rent, mortgage payments, compensation to employees, payment for maintenance and repairs, premiums for property, casualty or liability insurance for the licensee organization; on-going utility expenses; printing, postage and mail expenses; and any other expense incurred by the licensee organization directly in furtherance of its charitable or public service purpose; and (iii) donations for the purposes, and to the entities, organizations or associations, described under subsection 170(c)(1), subsection 170(c)(2) or subsection 170(c)(3) of the internal revenue code: Provided, That during a license period no more than twenty percent of the gross proceeds received from charitable gaming by a licensee which is not an entity, organization or association described in subsection 170(c)(1), 170(c)(2) or 170(c)(3) of the internal revenue code, regardless of the amount of expenses it actually incurs, as described in subdivision (i) and (ii) of this subsection, may be used for the expenses described in subdivision (ii) of this subsection: Provided, however, That notwithstanding any other provision of this article, each licensee which is not an entity, organization, or association described in subsection 170(c)(1), 170(c)(2) or 170(c)(3) of the internal revenue code, regardless of the amount of expenses it incurs as described in subdivision (i) and (ii) of this subsection, shall make the donations set forth in subdivision (iii) in an amount equal to not less than four percent of its gross proceeds received from the conduct of charitable gaming: Provided further, That in a license period, at least one-half of the amount of such donations shall be made by the remittance of money: And provided further, That in a license period, not less than twenty- five percent of the amount of such donations shall be made to entities described in subsection 170(c)(1) of the internal revenue code which have their principal office in the county in which the licensee conducts charitable gaming.
(b) The commissioner may disapprove any contract for sale of goods or services to any charitable bingo licensee for use in or with relation to any charitable bingo operation or occasion, or any lease of real or tangible personal property to any charitable bingo licensee for use in or with relation to any charitable bingo operation or occasion, if the contract or lease is unreasonable or not representative of fair market value. Contracts or leases which are disapproved shall be considered to be in contravention of this article, and are void. Any attempt by any charitable bingo licensee to engage in transactions under the terms of any lease or contract that has been disapproved is grounds for revocation or suspension of the charitable bingo license and for refusal by the commissioner to renew the charitable bingo license.
(c) If a property owner or lessee, including his or her agent, has entered into a rental contract to hold super bingo occasions on his or her premises, the premises shall be rented, for super bingo occasions, to not more than four super bingo licensees during any period of four consecutive calendar weeks: Provided, That each of the charitable or public service organizations desiring to hold a super bingo occasion must possess its own super bingo license. Subject to this limitation, the premises may be used for super bingo occasions during two consecutive days during a conventional weekend. For purposes of this subsection, the term "conventional weekend" means Saturday and Sunday. When used two consecutive days during a conventional weekend the super bingo occasions may occur at the same facility no more often than on alternating weekends during a calendar month.
§10A-1-19. Records, commissioner audit.
Any licensee which conducts charitable gaming as provided by this article shall maintain separate checking accounts and a separate bookkeeping procedure for receipts and expenditures under each of its charitable gaming licenses. A licensee may not commingle moneys from its operations under separate charitable gaming licenses, but it may, by check, transfer funds between the separate checking accounts to offset any losses from its conduct of charitable gaming under one license with gains from its conduct of charitable gaming under another license. Money for expenses may be withdrawn only by checks having preprinted consecutive numbers and made payable to a specific person, firm, association or corporation and at no time may a check be made payable to cash. A licensee with gross proceeds from charitable gaming in excess of five hundred thousand dollars per year shall utilize an electronic cash register approved by the commissioner which is specifically designed for bingo or raffles operations and which maintains an accurate record keeping system with sufficient detail so as to permit a paper trail which is easily verifiable and which may be easily audited. A licensee shall maintain all records required by this article for at least five years and the records shall be open to the commissioner for reasonable inspection. Whenever the commissioner has reasonable cause to believe a licensee has violated any of the provisions of this article, the commissioner may perform or cause to be performed an audit of the licensee's books and records: Provided, That the commissioner shall perform or cause to be performed an audit of the books and records of any licensee that has awarded total prizes in excess of five hundred thousand dollars. The commissioner shall file a copy of the completed audit with the clerk of the county commission of the county in which the licensee holds charitable gaming occasions.
§10A-1-20. Advertising.
A licensee may advertise its charitable gaming occasions in a manner reasonably necessary to promote the occasion.
§10A-1-21. Proceeds of state fair.
The Legislature declares that the proceeds of any charitable bingo games or charitable raffles which accrue to the West Virginia state fair are considered used for charitable or public service purposes as that term is defined by this article. Any proceeds allowed by the state fair board to be paid to or retained by persons who conduct charitable gaming occasions at the state fair are deemed to be expenses incurred by the state fair board.
§10A-1-22. State fair charitable gaming license; rules and regulations.

The West Virginia state fair board may apply annually to the commissioner for a state fair charitable gaming license to provide for the conduct of bingo or raffles occasions at the state fair. The license shall permit the state fair board to have one or more persons conduct bingo or raffles occasions at the state fair who have conducted bingo or raffles occasions on a regular basis for at least one year prior to the date of the state fair board's application. A license fee of five hundred dollars shall be paid to the commissioner for the state fair charitable gaming license. The provisions of sections eight, fifteen, sixteen and eighteen of this article do not apply to the licensee holding a state fair charitable gaming license. No state fair charitable gaming license may be issued unless the application includes a copy of any lease or agreement entered into between the state fair board and the persons who are to conduct bingo or raffles occasions at the state fair. The state fair board may adopt reasonable rules, not inconsistent with or in violation of the provisions of this article, to govern the holding of bingo occasions or raffles at the state fair.
§10A-1-23. Filing of reports.
Each licensee holding an annual license shall file with the commissioner a quarterly and an annual financial report summarizing its charitable gaming operations for the time period covered by the report. Each quarterly report shall be filed within twenty days after the end of the quarter which it covers. The annual report shall be filed within thirty days after the expiration of the license under which the operations covered by the report were held. The time period covered by the annual report is the full license year or, at the election of a licensee receiving state or federal funding, the most recently ended state or federal fiscal year.
Each licensee holding a limited occasion license or state fair license shall file with the commissioner a financial report summarizing its charitable gaming operations for the license period within thirty days after the expiration of the license under which the operations covered by the report are held.
Each report shall contain the name, address and social security number of any individual who receives, during the course of a bingo occasion or raffles, prizes, the aggregate value of which exceeds six hundred dollars, and other information required by the commissioner: Provided, That any licensee failing to file the report when due is liable for a penalty of seventy-five dollars for each month or fraction of a month during which the failure continues, the penalty not to exceed six hundred dollars.
§10A-1-24. Filing of copy of license; application open to public inspection.

Whenever a license is granted pursuant to this article, the commissioner shall cause a copy of the license to be filed and recorded with the clerk of the county commission of the county in which the charitable bingo or raffles are to be conducted. A copy of the application shall be made available for public inspection in the office of the commissioner.
§10A-1-25. County option election.
The county commission of any county is authorized to call a local option election for the purpose of determining the will of the voters as to whether the provisions of this article shall continue in effect in said county: Provided, That no local option election may be called to disapprove the playing of bingo or raffles games at the state fair in accordance with the provisions of this article.
A petition for local option election shall be in the form specified in this section and shall be signed by qualified voters residing within said county equal to at least ten percent of the persons qualified to vote within said county at the last general election. The petition may be in any number of counterparts and is sufficient if substantially in the following form:
PETITION ON LOCAL OPTION ELECTION RESPECTING THE CONDUCT OF BINGO AND RAFFLES GAMES FOR CHARITABLE PURPOSES IN . . . . . . . . . . . . . . . . . COUNTY, WEST VIRGINIA
Each of the undersigned certifies that he or she is a person residing in . . . . . . . . . . . . . County, West Virginia, and is duly qualified to vote in that county under the laws of the State, and that his or her name, address, and the date of signing this petition are correctly set forth below.
The undersigned petition the County Commission to call and hold a local option election at (1) a special or (2) the next primary, general or special election (the petition shall specify (1) or (2)) upon the following question: Shall the provisions of Article One, Chapter Ten-A of the Code of West Virginia, one thousand nine hundred thirty-one, as amended, continue in effect in . . . . . . . . . . . . . . County, West Virginia?
NameAddressDate
. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . .
(Each person signing must specify either his post office address or his street number.)
Upon the filing of a petition for a local option election in accordance with the provisions of this section, the county commission shall enter an order calling a local option election as specified in the petition. The county commission shall give notice of such local option election by publication thereof as a Class II- 0 legal advertisement in compliance with the provisions of article three, chapter fifty-nine of this code and the publication area for such publication is the county. The notice shall be so published within fourteen consecutive days next preceding the election.
Each person qualified to vote in the county at any primary, general or special election shall likewise be qualified to vote at the local option election. The election officers appointed and qualified to serve as such at any primary, general or special election shall conduct the local option election. If the local option election is to be held at the same time as a primary, general or other special election, it shall be held in connection with and as a part of that primary, general or special election. The ballots in the local option election shall be counted and returns made by the election officers and the results certified by the commissioners of election to said county commission which shall canvass the ballots, all in accordance with the laws of the state of West Virginia relating to primary and general elections insofar as the same are applicable. The county commission shall, without delay, canvass the ballots cast at said local option election and certify the result thereof.
The ballot to be used in said local option election shall have printed thereon substantially the following:
"Shall the playing of bingo and raffles to raise money for charitable or public service organizations continue in effect in . . . . . . . . . . . . . . . . . . County, West Virginia?
/ /Yes/ / No
(Place a cross mark in the square corresponding with your choice.)"
If a majority of the voters voting at any local option election vote no on the foregoing question, the provisions of article one, chapter ten-a of the code of West Virginia, one thousand nine hundred thirty-one, as amended, no longer continue in effect in said county.
No local option election may be called in a county to resubmit said question to the voters of that county, whether the question was approved or disapproved at the previous local option election, sooner than five years after the last such election in that county.
§10A-1-26. Prohibited acts by convicted individuals and corporations.

Any individual, organization, association or corporation convicted of any felony is prohibited from directly or indirectly obtaining a charitable license, conducting a bingo or raffles game, operating a concession, or leasing or providing to a licensee organization any premises where bingo or raffles occasions may be held within ten years from said conviction.
§10A-1-27. Administration; rules and regulations; civil penalties and other remedies.

(a) The commissioner shall administer the provisions of this article in accordance with the provisions of chapter twenty-nine-a of this code.
(b) To effectuate the provisions of this article, the commissioner shall propose rules for legislative approval in accordance with the provisions of article three, chapter twenty- nine-a of this code. In this regard, the commissioner may promulgate emergency rules pursuant to section fifteen of said article as the commissioner determines are necessary for the implementation of any provision of this article upon its effective date.
(c) The commissioner shall deny an application for a license if he finds that the issuance thereof would be in violation of the provisions of this article.
(d) The commissioner may suspend, revoke or refuse to renew a license if a licensee or any member of a licensee organization has been convicted pursuant to section twenty-eight of this article and the commissioner finds that it would be in the public interest to do so.
(e) The commissioner may suspend, revoke or refuse to renew any license issued hereunder for a material failure to maintain the records or file the reports required by this article if the commissioner finds that said failure will substantially impair the commissioner's ability to administer the provisions of this article with regard to said licensee.
(f) Notwithstanding any provision of this article to the contrary, the commissioner may:
(1) Revoke or refuse to renew any license issued under this article for any material violation of the provisions of this article or the legislative rules promulgated pursuant to this article;
(2) Suspend the license of any licensee for the period of time the commissioner deems appropriate, not to be less than one week nor more than twelve months, for any material violation of the provisions of this article or a legislative rule promulgated pursuant to this article;
(3) Place a licensee on probation for not less than six months nor more than three years: Provided, That in the event a licensee is placed on probation, as a condition of the probation, the licensee shall pay to the commissioner a probation supervision fee not greater than two percent of the gross receipts derived by the licensee from the conduct of bingo occasions during the period of the suspension, but in no event may the probation supervision fee be less than two thousand dollars. All probation supervision fee revenue shall be placed in a special account and used by the commissioner, after appropriation by the Legislature, to offset the expenses and costs incurred by the tax division to supervise the licensee;
(4) Require a licensee to replace any officer who knew or should have known of a material violation of the provisions of this article or any legislative rule promulgated pursuant to this article;
(5) Require a licensee to prohibit one or more members, supporters, volunteers or employees of the licensee involved in acts of material violation of the provisions of this article or any legislative rule promulgated pursuant to this article from all future bingo occasions held under the license, or for the period of time specified by the commissioner;
(6) Impose a civil money penalty in an amount not less than one hundred dollars nor more than four percent of the gross receipts derived by the licensee from the conduct of charitable gaming during a license period, for each material violation of the provisions of this article or any legislative rule during such license period: Provided, That in setting any monetary penalty for a first offense, the commissioner shall take into consideration the ability of the licensee to continue to exist and operate. For each material violation which is a second or subsequent offense, the amount of the civil penalty that may be imposed may not be less than five hundred dollars and may not exceed ten percent of the gross receipts derived by the licensee from the conduct of charitable gaming during the license period in which the offense occurred for each subsequent offense. The commissioner may impose civil penalties based on second or subsequent offenses notwithstanding the provisions of section twenty-nine of this article. Application of this subdivision and the amount of civil money penalty levied shall be determined in accordance with a legislative rule promulgated by the commissioner. Any licensee aggrieved by the amount of the civil penalty may surrender its license or, after exhausting all administrative remedies, have the matter reviewed in the circuit court of the county where the offense giving rise to the civil penalty occurred; or
(7) Order any one or more, or any combination, of the penalties provided for in subdivisions (1) through (6), inclusive, of this subsection: Provided, That no sanction or other remedy shall be imposed under this article on a licensee which is exempt or qualified to be exempt from federal income taxation under subsection 501(c)(3) or 501(c)(4) of the internal revenue code of 1986, as amended, but does not have bona fide members, due to failure to operate bingo occasions with members if the occasions are or were operated by residents of this state who have been employed by the licensee or been meaningfully associated with the licensee for one or more years before the date of the licensee's application for a license under this article, or its last application for renewal of a license under this article.
(g) The following administrative procedures govern the proceedings under this section:
(1) An order issued under this section shall be served by certified mail or in the manner provided in rule 4(d) of the West Virginia rules of civil procedure.
(2) A licensee may appeal an order of the commissioner issued under this section by filing a written protest with the commissioner, either in person or by certified mail, within twenty days after the licensee is served with a copy of the order.
(3) When a written protest is filed timely, the provisions of article five, chapter twenty-nine-a of this code shall apply. The commissioner may, by procedural rule, specify the form and content of a written protest.
(4) Within five days after issuance of an emergency order, the commissioner shall set a time and place for a hearing wherein the licensee may appear and show cause why its license should not be revoked.
(h) All fines, money penalties and fees imposed pursuant to this section, except the probation supervision fee imposed by subdivision (3), subsection (f) of this section, shall be deposited into the general revenue fund of this state.
§10A-1-28. Fraudulently conducted games; obtaining license fraudulently; other violations; criminal penalties.

(a) In addition to any other offense set forth in this code, any person who or licensee which knowingly conducts or participates in a fraudulently or deceptively conducted charitable bingo or charitable raffles game with intent to defraud is guilty of a felony and, upon conviction thereof, shall be fined not less than one thousand nor more than ten thousand dollars, or confined in a state correctional facility not less than one nor more than five years, or both.
(b) In addition to any other offense set forth in this code, any individual, association, organization or corporation which knowingly obtains or assists another in obtaining a charitable gaming license under false, deceptive or fraudulent pretenses is guilty of a felony and, upon conviction thereof, shall be fined not less than one thousand nor more than ten thousand dollars or confined in a state correctional facility not less than one nor more than five years, or both.
(c) Any person who violates the provisions of this article, or who violates any of the provisions contained in a legislative rule of the commissioner relating to charitable gaming is guilty of a misdemeanor, and upon conviction thereof, shall be fined not less than two hundred nor more than two thousand dollars for a first offense, and upon a second or subsequent conviction thereof, shall be fined not less than one thousand nor more than five thousand dollars or confined in a county or regional jail for not more than one year, or both.
§10A-1-29. Transitional amnesty.
(a) Notwithstanding anything in this code to the contrary, a licensee may elect to comply with the transitional amnesty provisions of this section in lieu of other enforcement action to which it may otherwise be subject under this article. For purposes of this section, the term "other enforcement action" means an action that, on or after the effective date of this article, is being taken, or may be taken, pursuant to an administrative decision or order or by agreement, including, but not limited to, any suspension, probation, criminal or civil penalty, fine or other punitive action, or alternative disposition and that is based on one or more violations of article twenty or twenty-one, chapter forty-seven of this code, which occurred before the repeal of such provisions, and which are alleged or admitted to having been committed by a person to whom a license was issued pursuant to the authority of either such article.
(b) A licensee that elects the transitional amnesty provided in this section shall retroactively satisfy, for the license periods with respect to which the other enforcement action against it relates, the provision of section eighteen of this article mandating that no less than an amount equal to four percent of the entire gross proceeds such licensee received from its conduct of charitable gaming during such license periods shall be donated by such licensee for the purposes, and to those entities, organizations or associations, described in subsection 170(c)(1), 170(c)(2) or 170 (c)(3) of the internal revenue code: Provided, That the amount of any past donations which an electing licensee shall have made to any such entities, organizations or associations with respect to the license periods to which the other enforcement action relates shall be counted toward satisfaction by such electing licensee of section eighteen of this article for purpose of the transitional amnesty provided in this section: Provided, however, That any such donations made by a licensee pursuant to this section shall only be made by the remittance of money and shall not count toward satisfaction of such licensee's obligations under section eighteen of this article for license periods commencing on or after the effective date of this article, if any.
(c) Any licensee that may be subject to other enforcement action and desiring to make the election permitted in this section, shall give written notice to the commissioner of its election of the transitional amnesty provided in this section no more than ninety days after the enactment of this article, or ninety days after the first notice it has of the initiation of such other enforcement action against it, whichever is later: Provided, That, upon receipt of such notice, the commissioner shall suspend and hold in abeyance, as to such licensee, the other enforcement action against it during the period described in the following sentence. A licensee which has given timely notice of its election, as provided in the preceding sentence, shall complete making the donations necessary to satisfy the requirements of such transitional amnesty not later than thirty-six months from the date such notice was received by the commissioner.
(d) Upon its full satisfaction of the requirements of this section, a licensee shall have the other enforcement action against it vacated, withdrawn and forever held for naught: Provided, That a licensee which fails to timely elect and satisfy the requirements of this section shall thereafter and forthwith be subjected to other enforcement action according to the original terms thereof.
§10A-1-30. Bingo and raffles equipment.
A licensee may use bingo or raffles equipment which it owns or which it borrows without compensation or leases for a reasonable and customary amount.
§10A-1-31. Certain operators of bingo games to provide for smoking and nonsmoking sections.

Any bingo operator who has more than one hundred bingo patrons at any bingo occasion shall provide a smoking and nonsmoking section, if smoking is permitted. The provisions of this section may not be varied or altered in any way by any local ordinance or regulation.
§10A-1-32. Solicitation and sales of bingo cards and faces, and raffles chances not to constitute solicitation of charitable funds.

Notwithstanding any other provision of this code to the contrary, the advertising, promotion and other solicitation of the sale of bingo cards and faces, and of raffles chances, and the sales thereof shall not constitute the solicitation of charitable contributions for purposes of article nineteen, chapter twenty-nine of this code, or otherwise.
§10A-1-33. Effective date.
The effective date of this article is the first day of July, two thousand.
§10A-1-34. Severability.
If, for any reason, any section, sentence, clause, phrase or provision of this article or the application thereof to any person or circumstance is held unconstitutional or invalid, such unconstitutionality or invalidity shall not affect other sections, sentences, clauses, phrases or provisions or their application to any other person or circumstance, and to this end each and every article, section, sentence, clause, phrase or provision of this article is hereby declared to be severable.
______

(NOTE: The purpose of this bill is to reform the regulation of charitable gaming. The bill repeals the articles on charitable bingo and charitable raffles, and combines them into one article.

The bill mandates that a portion of gross proceeds from charitable gaming be received by local government entities, charitable and veteran organizations and used for charitable, educational and public service purposes. In addition, employee number and compensation are increased and uses of proceeds from charitable gaming is further clarified.

This chapter is new; therefore strike-throughs and underscoring have been omitted.)